Which of These Is NOT a Reason Contributing to Escalation

question 113

Multiple Choice

Which of these is NOT a reason contributing to escalation of commitment?

• A)Self justification
• B)Prospect theory effect
• C)Perceptual blinders
• D)Closing costs
• E)Implicit favorites

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Definitions:

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums.

Break-Even Point

The sales level at which total revenues equal total costs, resulting in no profit but no loss.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, showing how much contributes to fixed expenses and profits.

Sales Mix

Sales mix refers to the proportion of different products or services sold by a company, impacting its overall profitability and performance.